Freight Shipping: 5 carrier performance benchmarks

Freight Shipping blog – One of the most important measurements for international shippers nowadays is performance tracking of your fleet. Without a clear view of supplier performance, it is impossible for shippers to run benchmarks and determine if there is a positive return on investment.

 

If you want to know the strengths and weaknesses of your carriers, you need to look at the numbers. That’s right, data! And to do it right…you need tools!

Shippers in today’s logistics environment often have tools in place for automated data capture. That being stated, it is recommendable to keep track of the score. An efficient way of doing this is by using a supplier scorecard. Implementing a scorecard helps shippers to obtain visibility in carrier performance and identifies needs around your global transportation footprint.

Yet, all metrics and scorecards are not equal, and you need to know what metrics should be included in your carrier scorecard.

macbook-online-scorecard

Freight Shipping – Why getting sharp deals is not enough

 

Imagine you just ran a large tendertool.ahabr.tech for a big scope LTL project in Europe. The project contained over 50.000 shipments and 30 carriers were invited to participate. Because the freight tendertool.ahabr.tech had been rather successful, your company managed to gain an overall of 20% savings on the scope. This looks very promising and your procurement team has done a very decent job! But ask yourself the following question: How are you going to make sure that the potential savings are realized? How are going to check that service levels are delivered? Compliancy? Assessorial costs? Are you paying the right amount on your freight invoices?

Based upon the measured performance criteria, action can be made. Workflows can be triggered to execute specific tasks. For example discharging a carrier from active service or generating and sending a low-performance notification.

1 – Freight bill accuracy

 

Carriers are going to make mistakes, and not just a few. Everybody knows it in the industry. Therefore, it is advisable to have a freight bill auditing solution in place. Potentially, Excess billing mistakes can cost your company a fortune.

Freight auditing will significantly  reduce overall transportation costs in the first place. But moreover, your freight invoice is a viable source of shipment information. With the logistics data, you can tackle carriers tend to exhibit the greatest number of inaccuracies and make accurate decisions decision with regards to your fleet.

Experienced Freight Audit Providers automate the capture and analysis of carrier delivery and freight invoice data. By doing so, it makes it much easier to identify performance issues and control freight costs.

2 – Damage free shipments

 

You always run the risk that your goods get damaged during transportation. And mostly, customers will hold the transportation company accountable.

Although damage may occur during shipping, customers hold the business accountable for the arrival of damaged items. As such, shippers should have a clear view what carriers cause damage (Numeric and percentile). Yes, again it is a matter of keeping score. This will prevent the costs of returns and replacements. Moreover, the data captured can identify why there is a higher risk of shipping from certain destinations.
To calculate the damage free shipment KPI, simply divide the number of damage-free shipments by the total number of shipments.

3- On-time delivery

 

To make the right calculation of on-time performance, divide the number of on-time shipments by the complete number of shipments. For example, 200 on-time shipments divided by 206 total shipments equals 97% on-time performance.

Freight Shipping

 

4- State of carrier equipment

 

Knowing the state of a carrier’s fleet and equipment is vital to reduce shipping risks and late deliveries. Track the reliability of a provider equipment by its age, average number of times it has broken down

Other relevant questions that could be asked are for example:

1. Is there a written SOP in place for maintenance of equipment ?
2. Are there special instructions or measures taken to avoid theft ? If yes, which ones.
3. Is there a written SOP in place for maintenance of equipment ?

5 – IT capabilities

 

Does your carrier have GPS on your trucks to monitor Track&Trace?Are they able to receive Transport Orders via EDI ? Which ERP system are your suppliers working with? IT-related questions like these are important to keep track off. You, as a shipper, need to keep an eye on continuous improvement. And so does your fleet!

Conclusion

 

To round up the subject, the impact of direct carrier rate increases is easy to manage for shippers. But it is more difficult to recognize the effect of a greater incidence of spot rates, or having to reach deeper into your routing guide to find carriers that will move your loads at their contracted rate. High fuel costs moreover mean a high increase of fuel surcharges, not to mention hundreds of other accessorial freight costs involved in shipping. Bottom line, keeping score of your carriers is important. A good way of setting the baseline for this is implementing a comprehensive questionnaire during your Logistics Tenders. Continue reading to see how Freightender has a built-in questionnaire solution in our cloud-based freight tendertool.ahabr.tech solution.

Improve your procurement scorecard during freight tendertool.ahabr.techs

 

Freight Tendering is a returning job for many shippers and carriers. And because tendertool.ahabr.techs are not just about lead times and costs anymore, service levels are becoming increasingly important. And so is the need for a good questionnaire, leading into a scorecard. The questions are there to make sure all business requirements are clear. Specific certifications may need to be in place, or certain equipment may be needed to be compliant. A good questionnaire makes it clear for the carriers what is required, and it also makes sure that the right carriers are selected. They easiest way to do this is to go digital. Check out the video below to see how.

 

About Freightender – Freight Sourcing

 

At Freightender we are constantly developing new features because of our close collaboration with our customers and we feel that is the only way how we can deliver true value to our customers. Freightender has the ambition to become the standard in freight tendertool.ahabr.teching and we want you to be part of the best practice in tendertool.ahabr.teching as well. We have gathered some more relevant content here below if you like to continue reading. If you like us to contact you for a demo or free trial account, please leave your details by using the following contact page. Thanks for reading!

 

 – 5 Proven Tactics To Receive The Best Freight RFQ Results

– Transportation Tendering: How You Reach 90% Time Savings

– 7 Ways Logistics E-Procurement Will Boost Your Logistics Tenders

– 5 Transport Tender Tips Carriers And Forwarders Must Share With Clients

– 5 Features Of E-Sourcing That Actually Add Value

 

Pieter Kinds

Pieter Kinds

CEO Freightender.com

Freightender is the standard in freight tendering. It makes the tender process lean, smarter and much faster. 
Fully cloud-based. Curious? Request a free live demo and join the Freight Tender Revolution!

Schedule Demo Freight Sourcing

Schedule Demo RFQ Management

Freightender at the Transport & Logistic 2023 in Munich

Freightender, a leading provider of digital freight procurement solutions, is excited to announce its participation in the upcoming Transport & Logistic 2023 exhibition to be held in Munich, Germany. The event, one of the largest trade fairs for logistics and...

Unlock the Secrets of Successful Transport Procurement

When it comes to transportation, it is important for companies to secure the most cost-effective and efficient solutions. One of the most important steps to achieve this is through transport procurement. Transport procurement is the process of sourcing the most...

A holistic approach to logistics procurement, what is that?

Logistics (procurement) has changed in the last couple of years as we all know. The volatility in capacity and pricing is also affecting how companies buy freight. Prices are no longer being kept stable without any change for a year or even two years. This has...

European road transport rates reach record levels

Rates in European road transport are breaking records. This according to the  Road Freight Rate Benchmark study, conducted by industry association IRU, research firm Transport Intelligence (TI) and transport platform Upply for the second quarter of this year....

Ocean freight RFQ: 3 experts tips for professionals in 2022

How can you run a successful freight RFQ? In this ultimate ocean freight procurement guide, we share 3 key topics to get in order before sending your tender: good communication, solid logistics data and dedicated and modern technology (freight procurement platforms)....

Freight Auditing: a critical component of the solution, not just a marketing gimmick.

Auditing invoices in logistics is not sexy, but it offers a key to many challenges. In this article, I dive into this somewhat obscure niche. What is freight auditing? So what is freight auditing? It's simply the conceptual term for various processes performed to...

NVOCC pricing vs Freight Forwarder pricing

Is the distinction between NVOCCs and freight forwarders significant? This is a common question, therefore we decided to investigate it further in the following post. Read on to learn everything there is to know about NVOCCs, including their responsibilities,...

Road freight tenders: postpone due capacity crisis in logistics?

People in shipper organizations wonder if they need to postpone road tenders as there is talk about capacity issues everywhere and apparently carriers don't respond to tenders. The worry is right as the logistics world has changed but of course, you should tender if...

Pricing management in Logistics: Lever with the highest impact on profit

The relevance of profitable freight and logistics pricing strategies is highlighted by the combined effects of increasing industry competitiveness and rising transportation costs. By now the logistics industry is in turmoil for well over a year with no relief in sight...

Tender Management: Why the future is digital

Customers want to acquire freight or negotiate freight rates, so they send out a tender or RFQ to a group of forwarders or carriers who wish to participate in the process. This is straightforward and transparent. The process behind it is less visible and can be found...